Arcadian closes in on eight new hotels

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ARCADIAN INTERNATIONAL, the hotel developer and operator, is about to triple in size with the acquisition of eight hotels in southern England.

It is buying one company which owns six hotels and Hidden Hotels, which owns two.

Arcadian did not say which company controlled the package of six properties but it is believed to be Clipper Hotels.

Clipper is also based in the South but has hotels on Jersey. Its current owner is the Merchant Navy's pension fund.

While Arcadian is yet to sign the deal with Clipper, it has prepared the funding by launching a rights issue yesterday. It is calling on shareholders for pounds 11.5m.

The total payment - for all eight hotels - will be pounds 22m. Arcadian will pay pounds 5.5m in cash, pounds 3m in shares, and it will also assume pounds 12.8m of debt - all of which is in Clipper. Robert Breare, chief executive, said that on completion Arcadian will have total assets of pounds 31m and debts of pounds 9m - equivalent to gearing of 30 per cent.

Arcadian is buying the eight hotels outright. Its ownership of five other hotels is shared but in each it is responsible for operating the facilities.

Mr Breare was formerly chief executive of Parkdale Properties which was sold to Pavilion - another hotels group - for pounds 60m in 1989.

Arcadian was created when it reversed into Westminster & Country, a shell vehicle. Shares in Arcadian, chaired by Sir Peter Parker, the former British Rail boss, rose 1p yesterday to 63p.